What's new at CITYnvest - January 2016

“Increasing capacities in cities for innovating financing in energy efficiency - a review of local authority innovative large scale retrofit financing and operational models”

The report reviews innovative financing and operational models for large-scale retrofits and explains possible mechanisms and instruments that could be used by local authorities to carry out renovation of their building stock. The report showcases the characteristics of the most effective initiatives that are currently being developed and deployed in Europe, as well as the challenges and risks inherent to each of the models. The document includes a simple tool, which helps to develop a strategic plan and an action plan.

The report is complimented by a self-assessment tool; the Recommendations Decision Matrix. The Matrix contains a set of questions, which help to determinate which model will be the most suitable for the local authority.

The guide for the launch of a one stop shop on energy retrofitting, based on RenoWatt’s experience in Liège is now available in our resources library. This toolkit clearly explains how to start an energy retrofitting project and identifies the main challenges and success factors. This document aims to share RenoWatt's best practices and to facilitate replication of the model elsewhere in Europe and on a larger scale. The toolkit addresses practical issues and offers step-by-step guidance for private and public actors.

RenoWatt is a procurement agency, acting on behalf of public authorities, which undertakes energy retrofits in their existing buildings stock. The main principles of RenoWatt are:

• Setting-up Energy Performance Contracts (EPC), which allows to cut the energy bill and the CO_² footprint of the municipalities and guarantees the energy performance of the retrofits
• Pooling of buildings, i.e. gathering buildings belonging to different municipalities in order to reach a sufficient size of a project. It allows to ensure the best renovation and maintenance price, as well as diversification of risk.

RenoWatt offers following advantages to the municipalities:

• simplification of the tendering process,
• technical audits conducted by the one stop shop and identification of the prospective investments
• drafting financial plans (analysis of the financial return)
• procurement of  EPC’s (from the draft of the specifications, to the negotiation with the ESCOs)
• pooling of buildings
• search for funding

For more information on the RenoWatt one stop shop model, download the toolkit from the resources library. 

The Joint Research Centre (JRC), the European Commission in-house science service, published a report entitled “Securing Energy Efficiency to Secure the Energy Union: how energy efficiency meets the EU Climate and Energy Goals”. In this piece of work, the JRC shows the central role of energy efficiency in meeting the Energy Union goals, and demonstrates that a 40% energy efficiency target for 2030 is the way forward.

The report addresses the need to overcome the challenge of financing energy efficiency investments. It  is  clear  that the existing  EU  funding  will  not  be  sufficient  to  transform  the  EU  economy  from  a fossil fuel based economy to a low-carbon economy unless they are blended with investments from Member  States  and  private  financial  institutions. JRC points out that public finance should be used mainly to remove the policy and financial risks by establishing the appropriate de-risking financial instruments such as guarantees, to boost innovation as  well  as  to build the  technical  capacity  needed  to  develop,  implement  and  monitor  energy efficiency policies and measures.

According to the authors, the policy  risks  could  be  removed  by 

• encouraging  the  use  of  energy  performance  contracting to remove  the  perceived  technical  risk  by  investors, 
• unlocking  the  utility  data  to  establish  more accurate baselines,
• developing instruments that allows for bundling small projects,
• upgrading skills,
• boosting  innovation;  and  
• assessing  energy  saving  by  third  independent  parties.

Financial  risks  could  be  mitigated  by  developing  risk  sharing  facilities to  provide  loans  guarantees thus reduce the  perceived  financial  risk through governmental guarantee  of first-loss  risks.

The full report is available on the JRC's website.

CITYnvest was present at the workshop on financing strategies for local authorities on energy and climate actions. The event took place on the 30th of September and was organised by the Covenant of Mayors (CoM).

The discussion focused around one of the main difficulties in implementation of the climate and energy actions, which is the lack of financial resources. During the meeting Elise Steyaert, the CITYnvest coordinator explained how CITYnvest can support the Sustainable Energy Action Plans (SEAPs) and the prospective synergies between Covenant of Mayors and CITYnvest.

The speech pointed out that 6,600 signatories of CoM have already defined the political commitment and have developed the measures for energy efficiency. Now, this potential should be unlocked by the access to financing for energy efficiency projects in the framework of SEAPs. The aim of CITYnvest is to close the gap between available funds and expectations of investors, and needs and capacities of local authorities. The CITYnvest project intends to make the difference by replicating solutions that actually worked and focusing on the local challenges. Thus, as stressed by the project coordinator, CITYnvest can help municipalities, regional authorities, Covenant of Mayors signatories and supporters to develop financing solutions in order to implement the actions, which they committed to in their SEAPs.

CITYnvest was well received by the participants of the workshops. They seemed to be convinced that the project is designed to meet the actual needs of local authorities.

The presentation from the workshop is available here.